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Chinese Companies Pivot to R&D, Away From Copycat Strategy

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Chinese companies are boosting product research and development spending to veer away from copying foreign products.

According to a Nikkei Asia report, listed companies in China spent $228 billion on R&D in 2022, a figure that has more than doubled over the last five years. These firms employ a total of 3.08 million researchers and R&D staff.

The publication identified China’s increasingly complex trade relationship with the U.S. and a slowing economy amid a looming property market crisis as several reasons why Chinese companies are detaching their reliance on foreign counterparts.

To develop semiconductors for central processing units and artificial intelligence solutions, Hygon Information Technology maintains a large R&D workforce in its operation, where such staff can earn an average annual income of $122,000.

Hygon, which debuted on the Shanghai Stock Exchange in 2019, accounted for 50 percent of the domestic server purchases of China Mobile and China Telecom from 2021 to 2022.

At another listed company, insulator maker Jiangsu Shemar Electric, the R&D staff accounts for 14 percent of the workforce manufacturing polymer insulators, lighter and longer-lasting than the ceramic insulators used in electric power cables.

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